It has been the ‘year of outsourcing’ for as long as I can remember. In the late 1990s, outsourcing was suddenly in the spotlight in Europe. It appeared on stage several years before that in North America. Certainly its impetus was helped by the financial crisis of the early 2000s as the pendulum swung big carriers to outsource and offshore in a rushed effort to cut costs and shore up the balance sheet. The impact on customer service was generally pretty grim, though, and as the pendulum swung the other way, some companies actually boasted that ‘you will now be put through to one of our UK based advisers.’
Since then carriers have had a long hard look at outsourcing and we have watched a more mature market for managed services emerge. According to research house Infonetics, this global carrier outsourcing market is likely to be worth $76 billion by 2016. It has already outperformed their projections for the first half of 2012 by two percent and this year, it will be a market worth $65 billion, up 11 percent on 2011.
This strong growth will be underpinned by strong partnerships. The term ‘managed services’ itself denotes a sea change in the model. Outsourcing used to be about cutting costs and was prone to mean ‘getting problems off my desk’. Now the most successful managed services partnerships are the ones that rely on just that – partnership – to work. Trust is the one ingredient that is not negotiable and there has to be no distinction between the people on the ground from the vendor and those on the ground from the carrier. And it is important to keep both parties involved. As one senior VP at a large North American carrier says, “our role is oversight and governance and even if you trust the partner implicitly, vendors and carriers simply think differently.”
At last, the pendulum that swung outsourcing between success and failure seems to be transforming itself into a virtuous circle where partnerships and core strengths can build empires.